Outsourcing hurts more than just Job Market

The media is paying increasing attention to outsourcing as the US economy struggles and jobs remain scarce. This is fine, but it doesn’t tell the whole story. Search the news and you’ll read about corporations shipping jobs overseas to lower production costs, to reduce training costs, and to generally reduce costs of doing business. Numerous other reports show the very large percentage of corporations similarly sheltering their earnings overseas, to avoid US taxes.

Meanwhile there are few jobs, high taxes, and decreasing services available to citizens.

But if you’re in tech and the web, you know how hard it is to find a good front end developer or web developer, or analytics ninja or generally highly-capable tech worker. The good ones are all fully booked. The ones that are available seem to be unworthy of your trust and dependence. What’s going on? Shouldn’t the demand for qualified workers drive the production of .. qualified workers?

Education and jobs.. collateral damage from the corporate outsourcing of American jobs and profits.

The public school system was created not to educate the masses but to train workers in the basic skills they needed to operate machinery and manage other workers. Prior to the industrial revolution, government and wealthy elites preferred the common man remain ignorant and dependent on them for jobs and basic survival. With the advent of machines we needed operating manuals, and workers who could write and read them. Public schools were created for corporations. Go ahead, research the history of public schools.

Throughout history local companies have pressed school boards to adjust curricula to support their local manufacturing and service economies. Large tech centers like Rochester NY rose out of funding and political influence from large corporation (like Kodak). Schools developed along with industry. We needed to fight for academic freedom and well-rounded education, but the major driving force was jobs jobs jobs because success was global and we needed to stay competitive.

In the past 40 years we’ve seen the US drop in mathematics learning as Asian nations excelled. There are parallels to economic development. In my years inside academia, I knew many academic leaders who pushed diligently for better high school education so that students would be better prepared for college. High schools needed to prepare kids for tech jobs. Colleges intended to prepare them for better jobs such as Engineering and management and leadership positions. Leaders lead others… other workers.

Perhaps corporate America has abandoned more than just creating US jobs and paying US taxes. They may have abandoned support of US education. After all, if they outsource the lower and mid-level jobs overseas, and select their top-tier employees from a global talent pool of self-funded university grads, do they really care about the previously important public school worker producing channels?

No. They can externalize the cost of advancing civil society just as they externalize the costs of pollution, hazardous waste, health insurance, and transportation. Soon I expect they will extend their externalization of the costs of defense to local security issues, as they increasingly need protection from the very same out of work, under-educated, lost-in-space citizens they have abandoned.

The decline of the community college tracks this… the inflation of the higher education finance bubble is a consequence of the collapse of the middle tier of universities, suddenly left with inadequate qualified students, inadequate industrial and commercial support, and an embarrassingly disconnected leadership. What could they do but get in line with the Wall Street Way, looking to fancy financial instruments to save their dying businesses?

The next time you think outsourcing is ok, and notice the substantial costs of worker hiring and retraining if you don’t outsource, remember there’s more to the story. Societal collapse, for example.